Magazine article Drug Topics

NCPA Urges New Payment Model for Community R.Ph.S

Magazine article Drug Topics

NCPA Urges New Payment Model for Community R.Ph.S

Article excerpt

In Philadelphia-the cradle of American liberty-the nation's independent pharmacists pledged to battle for their financial freedom. James Martin, who assumed the presidency of the National Community Pharmacists Association at its 103rd annual meeting in that city last month, said NCPA would focus "time and resources on developing the 'perfect' pharmacy reimbursement formula."

The formula would include five key elements of pharmacy practice, said Martin, executive director of the Texas Pharmacy Association. They are product costs, overhead, a base dispensing fee, a professional services fee, and a return on investment.

Underpinning that formula will be a study NCPA and the National Association of Chain Drug Stores have commissioned to determine what it really costs to put a prescription drug on a pharmacy shelf, not just its acquisition price. "What about return goods, outdated merchandise, ordering and inventory costs?" asked Calvin Anthony, who is stepping down after six years as NCPA executive vp. "All of this should be included in determining the true costs to stock a medicine in a pharmacy"

Anthony was responding in part to a recent government report that said the actual acquisition cost for brandname drugs was AWP (average wholesale price) minus 22%. "I don't know about you, but I'm still searching to find a community pharmacy that routinely gets those kinds of discounts," said Anthony, the owner of three pharmacies in his native Oklahoma. "My stores sure do not."

The federal report, done by the Office of Inspector General at the Department of Health & Human Services, acknowledged that there are costs beyond acquiring the medicine, which were not measured. They included "the cost to provide professional services other than the dispensing of a prescription for instances such as therapeutic intervention, patient education, and physician consultation and the cost of dispensing, which includes costs for computers, multipart labels, containers, technical staff, transaction fees, Medicaid-- specific administrative costs, and general overhead," said the report. NCPA incorporated exact language into a resolution approved by its house of delegates that urged Medicaid and Medicare reformers to include it in their calculations.

Another avenue to financial freedom to explore, said Martin, is through compliance and adherence programs. "I hope that through NCPA we will be able to work with manufacturers to create programs that drive patient compliance," he said. …

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